Interestingly enough, when detractors like to point out countries where communism "failed", it's always countries that did not have a rich history of colonialism and exploitation of cheap labor forces around the world.
It's almost as if countries, companies and super rich people are adored by the people in group 1 for their wealth by people while simultaneously are despised by the people in group 2 for the tactics they used to get that wealth. Some peope are both members of group 1 and group 2 which makes it even more strange.
I was unlucky to see and live in socialism. European democracies are not socialism by a mile. They are capitalist countries with some socialist elements. Yes, it makes sense.
Social democracy is a Socialist philosophy and has been ever since the spring revolutions of 1848.
You seem to confuse capitalism with market economy. Germany's social market economy was conceived as an alternative to capitalism; a market economy with strong focus on unions and social fairness/justice. In other European countries is very similar.
Socialism core principles have always been égalite, solidarity and democracy. It's pretty silly to think that a highly hierarchical, unjust and undemocratic system has anything to do with Socialism.
Hint; it doesn't. It might say so on the marketing material ("Socialist Republic!") but that's just that - marketing to fool the numbnuts.
European social democracies are among the top of the wealthiest countries in the world.
[1] https://en.wikipedia.org/wiki/Social_democracy